The Eurozone crisis – bad for Australia’s economy, good for international students?

CRISIS in the Eurozone has impacted Australia’s economy, with the Aussie dollar falling. But, as Andrew Yeung ponders, bad news for the economy could be good news for international students.

Photo: Chris Gordon

Europe’s debt crisis has finally made its way to Australia, forcing the dollar to fall significantly. But while the global financial crisis (GFC) may have spooked investors, big buyers like Asian international students could benefit from the devalued currency, as many Asian countries – including China, Hong Kong, Indonesia, Japan, Singapore and Malaysia – can now buy Australian dollars at a lower price.

But why the fall? Well, Spain’s banks bailout, Greece’s political stalemate and China’s economic slowdown have been deterring investment in Australia. Latest official statistics show the Australian dollar has fallen 5 per cent against the U.S. dollar since early May – a drop of more than 10 per cent since 2011. It’s now trading at 98.69 US cents, down from last year’s high of $1.108.

It wouldn’t be surprising if soaring inflation and tuition fees were troubling many international students across Australia, with tertiary education and rent inflating by 4.7 per cent and 1 per cent respectively.

But the fall in currency may now help ease the squeeze on international students, especially those who solely rely on family support.

Korean student Robin Kang is one person who appreciates the new exchange rate.

“I am happy that the Australian dollar is low now. Everyone can get the Australian dollar at a lower price,” he says.

He adds that even the slightest drop in the currency makes a big difference.

“I exchange AUS$20,000 every semester (and) I get all my money from Korea. So 1 per cent of increase or decrease of the Australian currency can mean one month of cost of living in Australia,” he says.

With Australia becoming more affordable, more international students may be inclined to study in Australia as well – which, ironically, might end up boosting Australia’s economy, and therefore its currency, in the long run.